A roundup of some of the North American equities making moves in both directions today
On the rise
Quebec-based convenience store operator Alimentation Couche-Tard Inc. (ATD.B-T) was up 1.2 per cent after announcing Wednesday it will go ahead with a two-for-one stock split as its profit continued to rise in the first quarter.
The split will take effect on Sept. 20. Couche-Tard shares closed at $82.34 in Toronto on Wednesday.
News of the stock split came as Couche-Tard reported net profit attributable to shareholders for the quarter surged 18 per cent year over year to US$538.8-million or 95 US cents per diluted shares, up from US$455.6-million or 81 US cents per share a year earlier. Excluding one-time items, per-share profit rose to 97 US cents per share, up from 87 US cents per share a year earlier
In a research note, Desjardins Securities analyst Keith Howlett said: “Management’s ambitious objective to double the company in five years is based on a close to even split between internal growth and acquisitions. With the acquisition market currently more competitive than usual, internal growth is increasingly under the spotlight.”
CIBC World Markets analyst Stephanie Price said: “Descartes reported in-line FQ2 results despite the heightened trade environment, with solid cash conversion (89 per cent) and strong margins (38 per cent). Management refined its EBITDA growth expectations for F2020 and now expects to be at the top end of its prior (mid-high 20 per cent) range. We continue to have a positive long-term view of Descartes. However, we see the potential for near-term headwinds amid slowing trade indicators.”
Lululemon Athletica Inc. (LULU-Q) was up 4.3 per cent ahead of the release of its second-quarter financial results after the bell.) jumped over 5 per cent on Thursday.
Lululemon, which has a recent track record of topping earnings forecasts, is expected to post earnings per share of 89 US cents on revenue of US$842.41-million in the most recent quarter.
Last week, RBC Dominion Securities analyst Kate Fitzsimons raised her financial expectations for the quarter noting, “With LULU shares up 48 per cent year-to-date, we expect they have further to go, with potential comp and EPS upside into 2H19 likely to support slight multiple expansion in a volatile retail backdrop. Layer on minimal exposure to China tariffs (6 per cent of total finished goods), lululemon is checking all boxes and remains a bright spot in consumer discretionary today.”
Saying it expects to grow sales at a double-digit pace over the next three years and forecast robust free cash flow, cybersecurity firm Palo Alto Networks Inc. (PANW-N) jumped almost 6 per cent on Thursday.
Palo Alto’s upbeat forecast came as it reported better-than-expected fourth-quarter revenue and profit, helped by strong demand for its cloud security products.
Credit Suisse analyst Brad Zelnick said: “Mixed F4Q results (better billings, worse Product revs) were followed by analyst day, where the company surprised by a) not announcing a business model transition that had been previously telegraphed, yet b) cutting adj. FCF margin to 30 per cent in FY20 from 37 per cent in FY19, without any real change in duration. Bulls will focus on the increased investment along with tuck-in M&A driving an organic 20-per-cent 3-yr revenue CAGR guided FY19-22. We continue to see risk with firewall the centerpiece of PAN’s architecture and security moving into the cloud.”
Apple Inc. (AAPL-Q) was up 1.9 per cent following an announcement on Thursday that it is has sold US$7-billion of bonds at yields ranging up to 103 basis points over the equivalent U.S. Treasury on maturities of up to 30 years, its first such debt issues since November 2017.
The company had said on Wednesday it was offering the five sets of notes, the first of which matures in 2022, to fund a range of needs including share repurchases, dividend payments, capital expenditures, acquisitions and repayment of debt.
Apple had cash and cash equivalents worth US$50.53-billion, as of June 29 as well as tens of billions more in securities holdings.
Aggregate net proceeds from the sale will be about US$6.96-billion after deducting underwriting discounts and Apple’s offering expense, the company said.
Users will also be able to integrate their Instagram posts into their Facebook Dating profile and add Instagram followers to their Secret Crush lists, the company said.
On the decline
Slack Technologies Inc. (WORK-N), the workplace messaging and communication platform, slipped 3.4 per cent after it posted a big loss in its first quarter as a public company as it spent heavily on sales and marketing to boost engagement on its platform and retain users.
The company said net loss attributable to common stockholders rose to US$359.56-million, or 98 US cents per share, in the second quarter ended July 31, from US$31.86-million, or 28 US cents per share, a year earlier.
Credit Suisse analyst Brad Zelnick said: “Slack reported solid F2Q earnings with revenue and billings ahead of expectations though the quarter’s performance and underlying fundamentals were masked by outage-related credits and what we perceive to be conservative guidance. TTM [trailing 12-mont] billings growth of 65 per cent year-over-year suggests strong underlying growth, with several wins at Office 365 customers highlighting the company’s differentiation and enterprise traction.”
Analysts were expecting revenue of $17.4-million.
Net income was $952,000, or 2 cents per share, down from $1.4-million or 4 cents a year ago.
With files from Terry Weber and wires